So far the latter seems to be the prevailing trend as the majority of public cloud platforms and private cloud software solutions start with the foundation of server virtualization. The bare metal options are being positioned more for two purposes:

Auto-provisioning new nodes ofthe cloud - bare metal installation of the cloud solution and the hypervisor

New compute resource types inthe cloud - using new automation capabilities to add a complete physical server to a customer’s cloud tenancy, as if it were just another virtual machine.